Exhaustion of T cells limits their ability to clear chronic infections or eradicate tumors. Here, in the context of transplant, we investigated whether T cell exhaustion occurs and has a role in determining transplant outcome. A peptide/MHC tetramer-based approach was used to track exhausted CD8+ T cells in a male-to-female skin transplant model. Transplant of large whole-tail skins, but not small tail skins (0.8 cm × 0.8 cm), led to exhaustion of anti-male tetramer+ CD8+ T cells and subsequently the acceptance of skin grafts. To study CD4+ T cell exhaustion, we used the TCR-transgenic B6 TEa cells that recognize a major transplant antigen I-Eα from Balb/c mice. TEa cells were adoptively transferred either into B6 recipients that received Balb/c donor skins or into CB6F1 mice that contained an excessive amount of I-Eα antigen. Adoptively transferred TEa cells in skin-graft recipients were not exhausted. By contrast, virtually all adoptively transferred TEa cells were exhausted in CB6F1 mice. Those exhausted TEa cells lost ability to reject Balb/c skins upon further transfer into lymphopenic B6.Rag1-/- mice. Hence, T cell exhaustion develops in the presence of abundant antigen and promotes transplant acceptance. These findings are essential for better understanding the nature of transplant tolerance. © 2020 The American Society of Transplantation and the American Society of Transplant Surgeons.